Building A Business On Scrap

Twice daily, Marsha Serlin dons a bright pink hard hat and makes her rounds through a wasteland of disassembled auto parts and industrial machinery. As she walks through the 35-acre yard in Cicero, Ill., Serlin, the chief executive of United Scrap Metal, stops to chat with laborers, truck drivers and salespeople. When she's finished with her rounds, she returns to her office overlooking the yard and fields phone calls from customers while keeping an eye on the action below.

United Scrap Metal is one of the largest industrial recyclers in the country. The company processes 140,000 tons of steel and 100 million pounds of other materials each year, and last year pulled in a record $215 million in revenues.

The company's success is a testament to Serlin's drive and determination. Thirty years earlier she'd fallen on hard times. Her marriage was falling apart, her car had been repossessed and her home faced foreclosure. But instead of sinking into despair, Serlin started looking for a way to feed her two young children and keep a roof over their heads. On a whim, she decided to try her hand at scrap metal recycling. It would test her resolve and change the course of her life.

The golden-haired Chicago native started working at the tender age of six. Her father owned three necktie shops, and she'd spend her afterschool hours threading needles, arranging merchandise and sweeping the company's factory floors. As a teenager, Serlin worked at one of their retail stores.

By the 1970s, Serlin was a wife and mother of two--a son, Brad, and a daughter, Cindy. She worked part-time taking care of houseplants for businesses and wealthy individuals. Her husband worked in marketing, but then his business failed. As household bills mounted, Serlin worried that the family would lose their home. She decided to end her marriage and started looking for additional work.

She tried selling clothes and insurance but quickly discovered she wouldn't make enough to keep her family afloat. Her finances took another big hit when she realized that she owed $250,000 in taxes.

At the time, she didn't have enough money to pay her utilities. She needed money in a hurry and recalled that one of her former plant-maintenance clients, Ray Ebbinger, lived in a luxury apartment building yet seemed to be home every day during normal working hours.

She called him up and asked what he did for a living. When he said he worked in scrap metal, Serlin asked him to "teach me everything you know in 24 hours." Surprised and a bit curious, he agreed. (She would later learn that the reason he appeared so relaxed was because he was on sabbatical from the scrapping business--a victim of severe job burnout.)

Serlin arrived at his scrap yard and quickly noticed that the floors were greasy. She was wearing a sun dress and heels and was greeted by Ebbinger's deep-bellied laugh. "I don't understand why you'd want to do this," he insisted. But since he'd earlier told her she could make as much as $300 a day, Serlin was committed to making it work.

In 1978, with only $200 in cash and a rental truck charged on her Sears credit card, Serlin started her business. She worked 16 hours a day, six days a week, scouring alleyways and knocking on factory doors for scraps. Her sister, meanwhile, had arranged for a housekeeper to stay with Serlin's kids in exchange for room and board.

Her first break came a year later when a blizzard blew through Illinois, shutting down train lines and halting most street traffic. Serlin received a tip that scrap was piling up in the aisles of a
Del Monte Foods
canning plant, threatening to close down the factory until it could be cleared. She called the company and persuaded them to give her a shot. With help from her brother, she cleared out the scrap and helped the plant avert a shutdown. Del Monte awarded Serlin with her first long-term contract.

Her competitors were impressed by her drive and, as often as not, surprised by her gender. For some men, the sight of a woman loading trucks with twisted metal and climbing behind the wheel was endearing, while others were enraged. "The men in the business underestimated me," she muses. "They thought I'd be gone in three months. After I'd lasted six months, they said maybe I'd last a year. In the meantime, I'm still here, and they're gone."

The intense physical labor produced dark bruises and aching muscles. One day Serlin decided to take a break from the scrap yard and get a soda to refresh her parched throat. When she pulled into a fast-food drive-in, the attendant stared at her in wide-eyed disbelief and asked if he should call the police. Confused, she looked around for a culprit and then realized that she was caked in dirt, her clothes were torn, and she had visible gashes. "Did somebody hurt you?" he asked. "Oh, no. I was just working," she replied, amused.

In the beginning, Serlin's home doubled as company headquarters. But before long, her house and garage were littered with barrels overflowing with fragments of aluminum, copper and stainless steel. In 1981, she bought a small dilapidated building in Cicero, a Chicago suburb, to serve as United Scrap's headquarters.

Over the next few decades, Serlin's company grew steadily. Whenever she had the funds, she would buy up property behind her office building, invest in better equipment and add more employees. Today, United Scrap employs 200 workers and has one of the industry's lowest turnover rates. One of her current employees, Benito Rosales, was the first person she hired, and over the years he's recruited 30 relatives to work for the company.

Serlin attributes the high employee-retention level to savvy hiring practices and attractive benefit packages. Once in the door, all new workers must first be trained in the yard--even if they're bound for the front office. Serlin believes that employees should understand where the material comes from and how to handle it. "Plus, I don't like prima donnas," she adds. Her son, Brad, now 41, can vouch for that.

Although he is currently second in command at United Scrap, he started as a laborer in the yard and spent 20 years climbing up the ranks. His mother insisted that he follow the same protocol as other aspiring employees. "I never had a desk for him in his first five years with the company," she says.

While Brad Serlin has clearly earned his place at the company table, the dynamic between mother and son can sometimes resemble what occurs at the dinner table. "Some days [Brad] thinks he's the boss, and some days I think I'm the boss," she says. Serlin says that they coexist in a "climate of friendly disagreement" and often argue over details. Last year, the junior Serlin insisted on buying a new crane that his mother didn't think was necessary. He purchased it without telling her, choosing to ask for forgiveness rather than permission. When she found out what he'd done, she told him that there'd better be a return on the investment or else he'd be driving the crane to work. He describes her reaction as "not pleased." "It's different than a father-son dynamic," adds Serlin. "He tends to treat me like the mom."

While Serlin once relied on United Scrap for survival, today the business is her proudest accomplishment. "I never looked at where I started, because it's always where you're going to end up that's important. I hope I can inspire someone else, a young woman who decides she can do whatever she wants without barriers."

I spent five years at Forbes writing about business and leadership, attracting nearly one million unique visitors to Forbes.com each month. While here, I assistant edited the annual World’s 100 Most Powerful Women package and helped launch and grow ForbesWoman.com. I've appe...